New-home sales hit decade low

The survey found detached home sales fell 9.7 per cent while apartment sales fell 6.9 per cent. Home sales fell sharply in every major state.
Photo: Rob Homer

by
Ben Hurley

Housing industry figures have intensified their call for an interest rate cut when the Reserve Bank of Australia meets today, following figures showing new-home sales fell to their lowest level in more than a decade.

March sales fell 9.4 per cent in ­seasonally adjusted terms, according to the HIA-JELD-WEN New Home Sales report, a survey of Australia’s largest 100 builders.

“The RBA needs to send a clear signal that it is back on the case of assisting an economy that is clearly weaker than it anticipated," said Housing Industry Association chief economist Harley Dale.

The survey found detached home sales fell 9.7 per cent, while apartment sales fell 6.9 per cent. Home sales fell sharply in every major state, with Queensland suffering the biggest drop at 15.3 per cent.

Queensland new-home sales volumes were about 40 per cent of their 10-year average, said Andrew Roubicek, director of residential for the Brisbane office of real estate group Colliers.

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The exceptions were resource towns like Mackay and Gladstone, where prices in some housing estates had risen 10 per cent in the past six months.

He said prices across broader Queensland were unlikely to fall any further, but potential buyers were not yet convinced.

“I can tell you, developers cannot buy and develop . . . any lower than they are doing right now," Mr Roubicek said.

New housing was only 6 per cent more expensive than existing housing, compared with a 30 per cent difference about four years ago, and an improvement in buyer confidence could turn demand around quickly.

“I think if you look at household savings, which are at all time highs, there is a mini war chest out there in terms of disposable income which people haven’t been spending," Mr Roubicek said.

BIS Shrapnel associate director Kim Hawtrey said he expected consumer confidence to improve by next year.

“What we’ve had is a pretty good set of economic numbers but a pretty ugly set of economic headlines in the early months of the year," Dr Hawtrey said.

“The Reserve Bank is saying we’re on trend growth, the economy is ­balanced . . . but job losses, banks putting up interest rates and bad news out of Europe – the combination of these psychological factors has hurt consumer confidence."